6 Effective Strategies to Turn Your Debt into Zero

6 Effective Strategies to Turn Your Debt into Zero

tribunwarta.com – It is not too late to turn your debt into zero faster especially if you know-how. If you want to pay down your debt as quickly as possible, this article will help you do just that.

Turn Your Debt Quickly

Overwhelmed by debt put some people into depression or other psychological problems. Not all debts are bad.

People need debt to meet their financial goals such as buying a house or a vehicle which is a good thing. But if much of the loan flow into consumptive expenses, it would certainly drain your income.

Some spend money beyond their monthly income and wind up indebted. The reasons are usually driven by impulses or desire to keep up with the trend, particularly when it comes to gadgets, technology or fashion.

[Read: 8 Simple Indicators To Show Financial Health]

But, sometimes because of unfortunate or unexpected events such as severe health problems, disasters, accidents, or other misfortunate events, people are caught up in debt. For situations such as these, debt can be unavoidable.

Now, if you really want to get out of debt faster, here are the main practical yet effective ways. Let’s check it out.

#1 Pay more

According to several banks in Indonesia, the capability of people to pay down their debt is no more than 30% of their income. It means that you can reduce your debt quickly if you pay more than the monthly payment.

If you have credit card debt Rp10 million and have Rp1 million for the minimum payment, it means you’ll need 10 months if you pay the minimum. But by paying Rp1,5 million monthly, it’d take only 7 months.

By paying down your bill more, chances are you’ll save on the interest during the period of the loan.

As inflation each year will reduce the value of your money, the sooner you pay the bill, the better for the cash flow. It’ll give you more chances to pay off other bills even to save and invest more.

#2 Don’t add another debt

By adding another debt, your capability to trim down your bills will decrease, especially if you already have many credit cards with high interest. It is a recipe for a crisis in your finance.

Therefore, attempt to manage your cash flow more strictly. You can sort out the expenses or monthly bills that are not necessary for you. Indeed, this part takes more discipline.

#3 Make a debt reduction plan

Make a debt reduction plan by sorting out all your debts first. You can identify them based on their category. Robert T. Kiyosaki, a financial expert in America, categorized two types of debts.

Secured and unsecured debt. Secured debt is the one with insurance (collateral) such as housing (KPR), or vehicle. While personal loans, medical insurance, or your credit card, including in the later.

He argued that you should eliminate the unsecured debt (which mostly come from credit cards) first.

[Read: 7 Top Things to Prepare Before Economic Recession]

Dave Ramsey, also a financial expert, proposed that people would be more encouraged or motivated to be free from debt if they start from the small one. The reason is starting from the bigger one will probably weigh you down emotionally.

GRATISSS Download!!! Ebook Panduan Investasi Saham Untuk Pemula

Though it doesn’t matter whether starting from a small one, the idea is to get you reducing debt faster according to your financial goals and condition.

You can allocate up to 30% of your income for debt payment. And give 5%-20% to start paying down the unsecured debts first or those with lower interest.

You can start paying down credit cards first. The benefit of this is because the fees will add up the longer you use the credit cards. Besides, the faster you close down the bills, the better the credit score you get.

In this way, you’ll have more money to continue trimming down the secured debt or those with higher interest.

#4 Double triple your income

Getting extra money help you out of debt more quickly. If you want to generate fast cash flexible and it doesn’t require so much of your time, some online income provided you just that.

And if you are a busy worker and have limited time to do more side jobs, then making fast cash online is probably your best shot. Here are some of the ways you can try.

    Earn money from online apps

    Maximize online marketplace

    P2P lending

    Buy an online business

[Read: Quick Ways to Get Money Online For Those Who Are Busy]

Another benefit of this step is you can turn the online income into a passive one which could give the financial freedom that allows you to retire soon and pursue the work you love doing. It also means having more time – which you didn’t have before- for your loved ones.

For non-online stream, try renting out your stuff. If you have a house with an empty room and still can be used, you can rent it.

The quick way is through Airbnb to help you promote and get guests quickly. You can gain a decent income out of this hustle. Another thing you need to prepare is the cost of maintenance.

Well, if AirBnB costs you too much time and energy or budget, you can save some of your bonuses, tips, little extra or gift from your job or birthday or wedding and add it into your debt reduction plan.

Indeed, having more income does half of the work to get you free from debt quickly.

#5 Manage your budget

One of the most important parts of your debt reduction plan is your budget. Your effort of adding up more income to pay down debt will be in vain if your expenses are oversized or outnumbered the income.

Therefore, to accelerate the process of reducing debt, you’ll need a strict budget.

[Read: 9 Ways To Manage Money Well For Young Adults]

A strict budget is the one set up for the basic need of living monthly. It aims to make you spend less and save more. This can be a great way of living less than or under your income. It doesn’t only get your budget under control, it also helps you notice things you really need versus stuff you want.

Here are some of the tips on managing the budget.

#1 Prioritize budget from the most important expenses

Make a list of categories on the most essential expenses you must spend monthly. They can be food, medicine, utility bills, transportation, childcare, and taxes.

To help you sort out the list, you can collect all bills from last month and find out which one that draining much of your cash. And leave the rest on the top list.

#2 Remove unnecessary expenses/bills

Eliminate unnecessary bills could help a lot for debt reduction. It is also an effective strategy for saving and investment plan.

Figure out non-essential bills. It is the one you can live without such as monthly subscription of cable TV, internet program, phone applications, unnecessary entertainment program or personal care.

#3 Build a wise shopping habit

Another way to get more cash on a strict budget is a wise shopping habit. There are a lot of ways to save money in your pocket while going shopping.

Try the substitution principle. Switch your primary needs to products or brands that are cheap or less expensive. Wait for sale or discount and avoid using a card for payment could help saving more as well. In this article, I detailed more ways of shopping tips to help you save more money.

#4 Finansialku Application

A simple way to manage your budget is by getting Finansilaku Application as your Financial planner. You can set your monthly budget and break down your monthly needs there.

The apps will help you focus and stick to your budget. You can download Finansialku Application in Google Play Store or Apple App Store right now.

Hopefully, in this way, you could redirect more of your income into your savings and investment plan.

#6 Invest in asset

An asset is a financial asset where you can keep or store your money. Assets could be land, stock, mutual fund, bank account, cash, bonds, business, property or real estate.

Since your financial goal is to reduce debts faster, then investing early in assets will help you to get there quickly.

[Read: The Basics On How To Start Investing]

Investment helps you to get more money relatively quickly if you know-how. To accelerate getting all your debt paid off, invest in assets with high liquidity, such as stock and forex.

Why you should consider them? Stock and forex are a financial instrument you can turn into cash quickly.


Not only that the buyer and seller are always present, which means you can actively trade it 24 hours, without waiting. Besides, the market is not only restricted to one’s nationality but globally.

You can do transactions everywhere through a smartphone. For stock, you only need Rp500.000 or Rp100.000 (for college student) to start investing.

Despite the benefits, there is a risk when investing in a stock. You may experience capital loss when the selling price is smaller than the buy price. Other risks are from the stock itself.

It happens when a company is going bankrupt/liquidated or its stock which you buy get suspended from a stock exchange.


Forex is a foreign exchange and its marketplace is the largest in the world. Similar to stock, it has high liquidity with 24 hours market transaction. No commission fees, but there is spread from the broker retail.

The good news is you can determine your position size (lot). And the transaction cost is less than 0,1%. Also, with a leverage system, you can make a profit from a small deposit.

[Read: Why You Need To Launch Online Business Now and How]

The risk of trading forex comes from the leverage that applies margin system. It means that if there is any fluctuation, traders will get a margin call where he needs to pay more to enable him to trade again.

Another risk is an interest rate where any change in it will cause substantial change for currency price. Besides that, time also determines significantly to currency price. Because of the time difference around the world, if you trade different time it will result in different prices.

Bearing in mind that the stock and forex market have their own risks, you need to know the basics of how to analyze them using technical and fundamental methods, and do research before trading or picking up stock.

Besides you need to make your risk management to control the loss. These ways help you to reduce loss and maximize return.


“Every time someone lends you money, you become his employee because your debt becomes an asset in his asset column and a liability in your liability column.” Robert T. Kiyosaki

There are various reasons why people have debt. Debt can be good if people know how to use it productively such as to build up assets. But some have many debts for a consumptive purpose which is bad.

To get out of debt quickly will not only reduce some negative emotions but also help you to have a healthy cash flow and in the long run to have financial freedom.

Hopefully, you find this article useful in helping you downsize even eliminating your debt faster.

And if you know someone who is struggling to reduce debt, share this information with them too.


    Holly Johnson. October 28th, 2019. 11 Ways to Get Out of Debt Faster. Thesimpledollar.com – https://bit.ly/2UHKDyr

    Holly Johnson. December 13th, 2017. How to Create a Bare-Bones Budget. Thesimpledollar.com – https://bit.ly/2WIsjbn

    Chonce Maddox. 5 Reasons to Pay Off Credit Card Debt First. Meettally.com – https://bit.ly/2QQrcm3

    Admin. Why Trade Forex: Advantage of Trading Forex. Babypips.com – https://bit.ly/2wFg98r

    Trevir Nath. June 25th, 2019. Top 5 Forex Risks Trader Should Consider. Inveatopedia.com – https://bit.ly/3bsviZn

    Robert T. Kiyosaki. 1969. You Can Choose to Be Rich. New Jersey: Prentice Hall.

Tinggalkan Balasan

Alamat email Anda tidak akan dipublikasikan. Ruas yang wajib ditandai *

error: Content is protected !!